Customer experience – Your North Star?

In 2014, Jake Sorofram from Gartner wrote a list of the most overused terms and even three years ago customer experience and omnichannel were on that list. Today these terms are used even more frequently, and every other company promises the best customer experience within their industry. The problem with these wardrobe staples are that as standalones they are vague to say the least, and when put together they can mean pretty much anything.

But as customer behaviour becomes more measurable thanks to an increasing number of touchpoints throughout the customer lifecycle, an increasing amount of data, and fast developing advanced analytics, we should consider defining these terms in a more concrete way, and talk about them as we would with other business terms. Omnichannel customer experience is not an umbrella for everything fluffy that falls outside of traditional business framework nor is it a single department’s responsibility. It is a strategic choice that needs to be managed and developed based on data, albeit not excluding the feelings and culture it is partially born from.

Developing customer experience

In 2015, at Talent Vectia we conducted a study on how firms perceive, develop and manage customer experience. In the study, we found that 95% of firms collect data on customer experience but only 30% make decisions based on their findings, and a mere 10% base development work on the data they collect. So, there are not small improvements to be done on this front, but rather a change in mindset and an understanding for how we can benefit from the growing data available to us today in developing the omnichannel customer experience. Customer experience is the sum of all interactions regardless of if they are online or offline. This means customer experience is always omnichannel, and should be viewed and developed as a whole.

Identifying and defining key interactions with the customer and understanding how they influence the overall experience is key in the creation of customer experience strategy. For example, Sephora has recognized that to support the non-linear purchase process and preferences of their customers, they need to understand how customers interact with the company and create content based on their customers behaviour patterns, not try to change how their customers behave. This also means the data flow between channels needs to be flawless. In-store interactions have been boosted by digital payment and barcode scanning to connect customers to product reviews by other customers and support in purchase decisions. Barcode scanning enables customers to feel supported when choosing products even when Sephora’s employees are not available. Digital payment not only speeds up the buying process but has been shown to double the amount and frequency of purchases. Companies such as Sephora have successfully utilized data on customer behaviour in creating a truly omnichannel model where the data and behaviour in various channels, including face-to-face encounters, support each other and form one seamless whole. As a result, value perceived by the customers increased and the chain’s sales and efficiency improved. Perceived customer value is the difference between perceived benefits and sacrifices.

To understand and develop the customer experience, you must understand what this equation means for your customer base. This means you can increase customer value either by increasing benefits or decreasing sacrifices. In order to succeed in this, a company has to understand its customer base and its everyday routines, and tailor themselves to become an extension of these routines. To realize its promise to be the neighbourhood gathering place that helps people make the most of their day and everyday life a little easier, another international organization, Starbucks, has, on the basis of its customer data, established different kinds of shops according to the location and local customer base. Close to schools and universities shops resemble labs for group work or libraries, in big downtown areas they are optimized to be fast take-away spots, and in smaller towns an extension of your living room where you can small-talk with your barista while lounging on a cozy leather couch.

Sometimes customer-oriented development can even reduce the amount of contact in traditional face-to-face service and thus increase perceived customer value. Starbucks listens closely to its customers and continuously makes small improvements to its services to make them more convenient for their customers. Last year they enabled customers in a hurry to order ahead and pay via the Starbucks app. This meant customers no longer had to wait in line to order and pay. Pick-up is made easy, so customers do not even have to interact with staff if they do not feel like small talking before 7.00 AM. Sephora and Starbucks are only two examples of international companies that have, with the help of data, gained incredible understanding of their customer base, from how they behave in different environments to the very different needs of different segments. They have developed and tailored their customer experience as a whole based on these insights, but prior to that they have made a very clear choice. A strategic choice to invest in the creation of good customer experience and its continuous development together with customers.

As consumers, we come across poor partly-optimized customer experience processes on a daily basis. As the availability of customer data is increasing, it may be challenging to understand what should be developed in order for it to benefit both the customer and the business operations. When developing omnichannel customer experience, it is good to remember the guiding principle of Sephora and Starbucks, according to which the operational models are to be developed on the basis of the customers’ needs and not the other way around.